New Service For Streaming TV Likely To Encounter Legal Trouble

February 15, 2012

Jedidiah Becker for RedOrbit.com

Using a novel and inexpensive new technology, the new distribution service Aereo plans to bring consumers access to broadcast television on their smartphones, tablets and Internet-ready TVs at a fraction of the price currently charged by most cable broadcasters.

For just $12 a month, Aereo each customer gets their own tiny antenna capable of streaming over 20 free-to-air broadcast channels, including ABC, CBS, NBC and Fox. Where it´s available, the channels can even be picked up in HD.

And that´s not all. Customers will also have a cloud-based digital recorder which they can use to store up to 40 hours worth of TV shows and even pause live broadcasts.

And well aware that the trend in consumer entertainment technology is towards simplification and consolidation, what sets Aereo´s service apart from predecessors like the FilmOn AIR tuner or the Elgato EyeTV is that it doesn´t require its users to connect any new hardware.

Rather than plug the tiny antenna directly into your smartphone or television, Aereo will cluster each customer´s little devices in individual blocks at one of the company´s data centers. Each individual antenna then streams the channels to an HTML5 app that can be accessed on any of your enabled devices.

While the company believes its customers will still want to subscribe to services like Hulu Plus or Netflix, traditional broadcasters are likely to feel the competitive heat as many increasingly price conscious consumers are expected to opt out of their pricey services.

Yet while Aereo says it will go ahead with its maiden launch in New York City in March followed by a city-to-city rollout, a number of industry insiders predict that traditional broadcasters are likely to launch a legal offensive in an attempt to keep the novel service from eating away at their already shrinking customer bases.

Broadcasters are likely to allege that Aereo´s service runs afoul of copyright laws, a legal strategy that has proven immensely successful in helping the industry squash potential competitors in recent years.

The focus of the almost inevitable litigations, one anonymous patent attorney told the Los Angeles Times, is that Aereo isn´t just using the available signal, it´s also modifying it without licensing in order to make it compatible with new digital platforms.

When Aereo first announced its plans last April, LA Times writer Jon Healey called it “a lawsuit waiting to happen.”

The major networks have till now declined to offer official comments on Aereo plans.